Business payments giant NCR and digital asset management firm NYDIG, along with community banks, including North Carolina-based First Citizens Bank, and credit unions, including Bay Federal Credit Union in California, announced a deal. Which will allow 650 US banks to offer bitcoin purchases to an estimated 24 million customers?
Rather than having to deal with onerous regulatory requirements related to owning cryptocurrency for their clients, financial institutions that choose to make the service available will rely on NYDIG’s escrow services and will be able to offer their clients trading. Of cryptocurrencies through mobile applications built by the payment provider.
In this way, NCR, a company based in Atlanta, continues its efforts to capitalize on the demand it is seeing from banks and credit unions, tired of seeing cryptocurrency purchases made from their accounts to external exchanges.
Douglas Brown, President of Digital Banking at NCR, said: “We strongly believe in the benefits of the crypto ecosystem and strategic application. This agreement will benefit our banking relationships, as demonstrated by NYDIG, and all retailers, restaurants and the like. ”
By giving these customers a way to buy bitcoin – and eventually spend it – within their existing accounts, traditional financial institutions would become part of the rising tide of traditional financial institutions in direct competition with exchanges.
Brown confessed that “dozens” of NCR bank and credit union clients have come to the company complaining that their clients were using their savings to buy bitcoin and other cryptocurrencies. Rather than lose those assets on third-party exchanges, or send nasty notes to their customers saying they don’t approve of purchases, they decided to capture that value by providing the services on their own.
“Many of these banks have seen that one of the biggest outflows for their depositors is moving money from the bank to exchanges like Coinbase,” said Stone Ridge co-founder Yan Zhao, who joined NYDIG as president in December 2020. “This is part of the reason that banks are so excited to have this opportunity for themselves and their consumers.”
Faze one of the NYDIG partnership will allow NCR banking clients to buy, sell and trade bitcoins and other cryptocurrencies from their mobile app.
While the buyer will feel like they are working directly with the bank to make these purchases, on the backend, NYDIG will hold the actual assets. When a client wants to buy bitcoin, it will be sourced from various regulated OTC exchanges and sold at a slight markup based on the size of the trade and other factors. NYDIG, in turn, will receive a monthly fee per user from the bank.
Finally, Brown stated that “Today’s banking is a daily or a couple of times a day activity for people, which is what we tend to see. Cryptocurrencies, on the other hand, reach a much higher level of engagement, every hour, much deeper. “